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Freelance workers have several challenges to face each year. One such challenge is tax preparation. Knowing what can be claimed as a deduction and what could flag you for an audit will help you protect your financial future. My blog contains all sorts of things that freelance workers should know about their finances and their tax preparation methods. You will learn tips about keeping thorough records and advice that can help you avoid the dreaded tax audit this year and many years into the future. Hopefully, my several years of working as a freelancer and with an accountant will help you get through these difficult months successfully.

Small business owners will be some of the taxpayers most affected by the tax law changes enacted for 2018. How will these new rules affect your business? Here are 5 key ways.

Business Tax Rates. Whether your business is a pass-through entity (generally a sole proprietorship, partnership or many LLCs) or a corporation, you will likely see lower tax rates. Individual tax rates have been adjusted to new tax brackets that should result in many people experiencing a lower overall tax burden. And corporate tax rates have been lowered to no more than 21% (from a previous top rate of 35%). Pass-through entities who have a small gross income may not see much change from this, though.

Bonus Depreciation. Bonus depreciation allows a business to purchase large assets and deduct most or all of their cost in the year in which it places the item in service. Provisions to deduct 100% of the cost of such an asset have been extended through 2022 in the new tax law. In addition, bonus depreciation used to be limited to new assets, but now it can be taken for items purchases used as well.

Interest Deduction. Your ability to deduct interest paid by the business will be limited. Whereas in the past, a business could deduct 100% of interest payments from taxable income, that deduction is limited to 30% of earnings. This could result in a large tax increase for businesses who are heavily leveraged.

Research and Development. Costs of research and development have been fully deductible in the year in which they were incurred. However, this will change beginning in 2022. At that point, your business will need to write off costs over a five year period.

Health Insurance. The major change to health insurance plans will come indirectly for most small employers. Because the tax penalty for not carrying health insurance will be terminated, businesses may see a change in employees signing up for company health insurance. Some will choose to skip the expense, thereby reducing employers' costs of coverage. However, experts expect the cost of individual plans to rise, which employers may also see in their rates and rates of employees buying coverage through the business.

As your business starts planning for 2018 and beyond, keep these tax factors in mind. For more information on how you can cope with or work with the changes to help your business thrive, contact a qualified certified public accountant (CPA), like one from Vlasac John M & Co, today.